Which of the following is an advantage of using modern currency instead of a barter system?

• A. It makes transactions more complicated and time-consuming.
• B. It allows for easier comparison of value between goods and services.
• C. It requires both parties to want exactly what the other has.
• D. It eliminates the need for a medium of exchange.

Answer: (B)

Verified step by step guidance

1. Understand the concept of a barter system: it involves direct exchange of goods and services without using money, requiring a double coincidence of wants (both parties must want what the other offers).
2. Recognize the role of modern currency as a medium of exchange that facilitates transactions by providing a common measure of value.
3. Identify the problems with barter, such as difficulty in comparing the value of different goods and services and the need for both parties to want each other's goods.
4. Analyze how modern currency simplifies transactions by allowing easier comparison of value between goods and services, removing the need for a double coincidence of wants.
5. Conclude that the main advantage of modern currency over barter is that it allows for easier comparison of value, making trade more efficient and less time-consuming.